New Year, New Laws: Compliance Challenges U.S. Employers Face in 2015

Members may download one copy of our sample forms and templates for your personal use within your organization. Please note that all such forms and policies should be reviewed by your legal counsel for compliance with applicable law, and should be modified to suit your organization’s culture, industry, and practices. Neither members nor non-members may reproduce such samples in any other way (e.g., to republish in a book or use for a commercial purpose) without SHRM’s permission. To request permission for specific items, click on the “reuse permissions” button on the page where you find the item.

Page Content

Although this year's labor- and employment-related legislative activity was down slightly from that of 2013 – in part due to congressional gridlock – by no means was 2014 insignificant. Throughout the year, an influx of new and amended laws requires employers to establish, revisit, or revise policies and practices.

Although the November elections changed the political landscape in Washington as well as in a number of states, the contests were not solely between candidates for office. Voters also went to the polls to voice their position on ballot initiatives benefitting employees. On these issues, voters resoundingly approved pro-employee measures. Approval of these ballot measures suggests that employers could face even more new state and local mandates in the years ahead.

While our attention pivots to 2015, which brings a bevy of new compliance obligations for employers, we must also examine what transpired the past 12 months to understand continued and emerging challenges employers will confront in 2015 (and possibly in future years).

A divided Congress may have forestalled federal legislative changes, but the legislative gridlock at the federal level accelerated efforts by state and local jurisdictions to pass more labor and employment laws. As highlighted below, the types of new and amended laws, as well as the level of legislative activity, run the gamut.

Although wage and hour is the standout issue, states and localities also enacted measures concerning alternative dispute resolution, background checks, benefits, contingent workers, discrimination, leaves of absence, notices, posting, privacy, recordkeeping, reductions-in-force, retaliation, taxation, unemployment, whistleblowing, workers' compensation and workplace safety. While it is no surprise that California enacted the most employment laws in 2014, large and small states from every corner of the country also took action impacting employers.

State and local legislators made boosting lower-paid employees' wages a priority this year. In 2015, the minimum wage rates in at least 25 states will change. Moreover, Maryland has scheduled two increases: one in January and another in July 2015. Additionally, New York will continue its recent tradition of increasing minimum wage rates on New Year's Eve, with increases scheduled to take effect on Dec. 31, 2014, and again on Dec. 31, 2015. Employers in northern California's greater Bay Area will see four cities establish or increase their local minimum wage to an amount above the state rate, which is already higher than the federal minimum wage.

State and local elected officials also sought to improve employee well-being by mandating paid sick leave. There was a noticeable uptick in paid sick leave legislation in 2014. California and Massachusetts created measures that will take effect in 2015, joining Connecticut and the District of Columbia, and doubling the number of state-level jurisdictions with paid sick leave requirements. Local jurisdictions, however, continue to outpace states in enacting paid leave legislation. For example, in 2015, there will be more local paid sick leave laws in various New Jersey jurisdictions than exist at the state level nationwide. Shortly after California enacted a statewide law, voters in Oakland joined their neighbors in San Francisco by approving a paid sick leave measure. Although Oregon has no state-level requirement, paid sick leave is required in the city of Portland, and will soon be required in the city of Eugene.

There also is a burgeoning trend toward extending employment protections to non-employees. In 2015, California and Illinois will grant interns fair employment protections. This nearly doubled the overall number of states that do so, beyond just the District of Columbia, New York and Oregon.

The picture of compliance challenges in 2015 is not complete without an understanding of both regulatory and legislative changes. Just as the federal legislative gridlock prompted state and local governments to pass legislation similar to that stalled in Congress, the federal gridlock also prompted the Obama Administration to make changes through rulemaking, with some of these changes expected in 2015.

Legal obligations have become increasingly dynamic, so static employment guidelines, handbooks and trainings provide employers no refuge. Maintaining and providing up-to-date policies and practices is made more daunting by staggered effective dates for various new laws and regulations. Accordingly, employers must make diligent efforts to ensure compliance obligations are timely met at the federal, state and local levels. To assist employers, the chart below briefly summarizes select federal, state and local changes that will occur in 2015.

Laws Effective Jan. 1, 2015

Minimum wage increases to $7.50 per hour, with increases in January 2016 and 2017.

California

AB 2617

Alternative Dispute Resolution

Prohibits requiring an individual to waive the right to file a civil rights charge with the government or a lawsuit in court as a condition of entering into a contract for goods or service. Requires knowing and voluntary written waiver.

California

SB 1034

Benefits

Prohibits imposing any waiting or affiliation period in addition to any waiting period imposed by an employer for a group health plan on an otherwise eligible employee or dependent. Amends requirements concerning eligibility for coverage exclusion.

California

AB 2047

Civil Procedure

Clarifies that the statute of limitations for liquidated damages for various labor code violations is the same as that for the underlying violation.

California

AB 1897

Contingent Workforce

Provides that a client-employer is jointly liable with the labor contractor for wage and hour and workers' compensation law violations.

California

AB 1443

Discrimination

Extends anti-discrimination and harassment protections to interns and volunteers, and broadens categories of programs subject to this prohibition.

California

AB 1660

Discrimination

Undocumented aliens can obtain a driver's license that displays a notice stating the license does not establish eligibility for employment. Employers cannot discriminate against individuals possessing or presenting such licenses.

Volunteer emergency leave law's definition of emergency rescue personnel is expanded to include an officer, employee, or member of a disaster medical response entity sponsored or requested by the state.

Computer software professionals are exempt from overtime if their hourly rate of pay is no less than $41.27. If paid on a salary basis, the employee must earn an annual salary of no less than $85,981.40, be paid at least once a month, and be paid a monthly amount of no less than $7,165.12.

California

Exempt Licensed Physician & Surgeon Pay Requirements

Wage & Hour

Physicians and surgeons are exempt from overtime if their hourly rate of pay is at least $75.19.

Generally prohibits stay or suspension of a requirement to abate a hazard found to constitute a serious, repeat serious, or willful serious violation, while the employer's appeal of the citation is pending.

Minimum wage increases to $7.75; for tipped employees, maximum tip credit increases to 50 cents if the employee's wage plus tips are at least $7 more than the minimum wage. Additional increases in January 2016, 2017, and 2018.

Minimum wage increases to $8.00 per hour; for tipped employees, maximum tip credit increases to $4.37 per hour. Additional increases to occur in July 2015, 2016, 2017, and 2018. Also amends training wage and wage paid to employees in amusement / recreation establishments.

Maryland (Montgomery County)

Expedited Bill 36-14

Background Checks

Creates "ban-the-box" law for employers with 15 or more employees. Prohibits criminal inquiries, disclosures, and checks until first interview concludes, unless exception exists.

Massachusetts

SB 2195

Wage & Hour

Minimum wage increases to $9.00 per hour; for tipped employees, minimum cash wage increases to $3.00 per hour and maximum tip credit increases to $6.00 per hour. Additional increases to occur in January 2016 and 2017. Minimum wage for agriculture and farming employees also increases.

Minnesota

HF 779

Benefits

Establishes certain requirements for the provision of health insurance in Minnesota to be further in line with the federal Patient Protection and Affordable Care Act.

Minnesota

HF 2576

Civil Liability

Renders inadmissible in a private lawsuit against an employer evidence of acts committed by an employee where information relating to the employee's criminal history record was expunged before s/he committed the act at issue.

Minimum wage increases to $8.00 per hour; for tipped employees, maximum tip credit increases to $5.87 per hour. Additional increase to occur in January 2016.

Nebraska

LB 765

Wage & Hour

Allows wage payment via payroll debit card if requirements met.

New Hampshire

SB 207

Discrimination

Prohibits conditioning employment on a promise to refrain from disclosing wages, or waiving the right to disclose wages, salary, or paid benefits, and retaliation for disclosure. Amends the statute of limitations for administrative claims and private suits. Includes notice and posting requirements.

Regulations address the treatment of dental and vision benefits and employee assistance programs as limited excepted benefits, which are generally exempt from the ACA market reform requirements. Rules apply to group health plans and group health insurance issuers for plan years starting in 2015.

United States

Executive Order 13658

Government Contractors

Minimum wage increases to $10.10 per hour for employees of certain government contractors; increases minimum wage of tipped employees to $4.90 per hour. Provides for future increases.

United States

Affordable Care Act's Shared Responsibility Provision

Healthcare

The ACA's employer "pay-or-play" mandate will generally apply to larger firms with 100 or more full-time employees as of January 1, 2015.

United States

IRS Rev. Proc. 2014-30.

Taxation

Increases annual limitation on deductions for HSAs to $3,350 for an individual with self-only coverage under a high deductible health plan and $6,650 for an individual with family coverage under a high deductible health plan.

United States

OSHA Final Rule re 29 C.F.R. part 1904

Workplace Safety

Updates list of industries that are partially exempt from OSHA recordkeeping requirements. Expands the types of work-related injuries that must be reported.

Creates unemployment work-sharing program allowing an employer to temporarily reduce employees' work hours in lieu of layoffs with the state paying affected employees a percentage of unemployment insurance benefits.

Washington

2015 Minimum Wage Determination

Wage & Hour

Minimum wage increases to $9.47 per hour.

West Virginia

HB 4283

Wage & Hour

Minimum wage increases to $8.00 per hour; for tipped employees, maximum tip credit increases to 70% of minimum wage. Additional increase to occur in January 2016.

West Virginia

HB 201

Wage & Hour

Employers are exempt from state maximum hours and overtime requirements (but not minimum wage) if 80% of employees are subject to federal law concerning maximum hours and overtime.

Laws Effective Jan. 7, 2015

Jurisdiction

Item

Main Topic

Summary

Paterson, New Jersey

Sick Leave Ordinance

Leaves of Absence

Creates paid sick leave law.

Laws Effective Jan. 15, 2015

Jurisdiction

Item

Main Topic

Summary

Vermont

HB 758

Reductions in Force

Creates mini-WARN law.

Laws Effective Jan. 20, 2015

Jurisdiction

Item

Main Topic

Summary

Prince George's County, Maryland

CB-078-2014

Background Checks

Creates "ban-the-box" law for employers with 25 or more employees. Prohibits criminal inquiries, disclosures, and checks until after the first interview, unless an exception exists.

Laws Effective Jan. 31, 2015

Jurisdiction

Item

Main Topic

Summary

Delaware

SB 185

Discrimination

Expands disability discrimination law to apply to employers with four or more employees.

Laws Effective Feb. 24, 2015

Jurisdiction

Item

Main Topic

Summary

Alaska

Measure 3

Wage & Hour

Increases the minimum wage to $8.75 per hour. Additional increase will occur in January 2016. Future increases will be based on inflation.

Alaska

Measure 2

Workplace Safety

Allows people age 21 and older to possess up to one ounce of marijuana and up to six plants.

Laws Effective March 1, 2015

Jurisdiction

Item

Main Topic

Summary

New Jersey

SB 2124

Background Checks

Restricts covered employers from asking about or using an applicant's criminal history record when making employment decisions.

Laws Effective March 2, 2015

Jurisdiction

Item

Main Topic

Summary

Oakland, California

Measure FF

Leaves of Absence

Creates paid a sick leave law.

Oakland, California

Measure FF

Wage & Hour

Establishes a minimum wage of $12.25 per hour. Regulates service charges in the hospitality industry.

Laws Effective April 1, 2015

Jurisdiction

Item

Main Topic

Summary

Colorado

HB 1383

Workers' Compensation

Amends the required number of healthcare providers on the list of providers from which a worker can choose to seek medical treatment.

Seattle, Washington

Ordinance No. 124490

Wage & Hour

Establishes a minimum wage, which varies based on employer size. Differentiates between hourly minimum wage and hourly minimum compensation. Set increases to occur in January 2016 through 2018 and/or 2025, depending on employer size.

Laws Effective April 8, 2015

Jurisdiction

Item

Main Topic

Summary

United States

OFCCP Rule Implementing Executive Order 13672

Discrimination

Implements Executive Order 13672, prohibiting discrimination based on sexual orientation and gender identity by contractors and subcontractors.

Laws Effective April 14, 2015

Jurisdiction

Item

Main Topic

Summary

United States

NLRB Rule Governing Representation Case Procedures

Labor-Management Relations

Revises union representation and election procedures under the National Labor Relations Act.

Laws Effective Aug. 1, 2015

Jurisdiction

Item

Main Topic

Summary

Minnesota

SB 1775

Wage & Hour

Minimum increases to $9.00 (adult) and $7.25 (minor) for large employers, $7.25 for small employers, and $7.50 for certain hotel employers. Additional increase will occur in August 2016. Annual increases will occur beginning January 2018. Also amends training wage.

Ilyse Schuman, co-chair of Littler's Workplace Policy Institute® (WPI™), is a shareholder in the Washington, D.C. office; Michael Lotito, co-chair of the WPI, is a shareholder in the San Francisco office; and Sebastian Chilco is a research attorney in the San Francisco office. Littler's WPI is devoted to developing and influencing workplace legislative and regulatory developments at the

Members may download one copy of our sample forms and templates for your personal use within your organization. Please note that all such forms and policies should be reviewed by your legal counsel for compliance with applicable law, and should be modified to suit your organization’s culture, industry, and practices. Neither members nor non-members may reproduce such samples in any other way (e.g., to republish in a book or use for a commercial purpose) without SHRM’s permission. To request permission for specific items, click on the “reuse permissions” button on the page where you find the item.